Wyatt was arrested at his home in Houston this morning and appeared before a U.S. Magistrate Judge. He is scheduled to be arraigned next week in New York.

In the latest indictments to emerge from the ongoing investigation into the United Nations' oil-for-food program, a New York grand jury has accused Wyatt and two Swiss business executives of funneling cash to front companies and bank accounts controled by the Iraqi government.

"The oil-for-food program was designed to provide humanitarian relief to the Iraqi people; these defendants undermined those relief efforts to line their own pockets with oil profits," said Michael Garcia, U.S. Attorney for the Southern District of New York, said in a prepared statement today.

Wyatt, the former chairman of what was once Coastal Corp., is also accused of conspiring with fellow Houston oilman David Chalmers of BayOil (USA), who was indicted on similar charges earlier this year.

Wyatt attorney Tony Canales declined immediate comment, saying his office was preparing a statement. An attorney for BayOil declined to comment.

If convicted Wyatt and the other defendants could each face up to 62 years in prison. Prosecutors also hope to force the defendants to forfeit at least $1 billion in assets.

Wyatt and the other defendants are accused of cooperating with Saddam's regime to exploit weaknesses in the oil-for-food program. The U.N. effort was designed to use Iraqi oil sales for food and medicine during the years of economic sanctions.

The United Nations was supposed to retain complete control of those oil sales to keep the revenue generated out of Saddam's hands. U.N. officials determined the price to be paid for Iraqi oil, trying to match market conditions as closely as possible.

And proceeds from those sales were deposited into a U.N.-monitored bank account in Manhattan.

Saddam's government was permitted to choose its own customers.

And investigators have learned that Baghdad pressured those recipients to pay secret surcharges for the privilege of buying Iraqi crude.Wyatt had had dealings with the Iraqis for many years prior to the imposition of sanctions.

In December 1996, his Coastal Corp. allegedly received the first allocation of oil, some 11.35 million barrels, awarded by Saddam's regime under the oil-for-food program.

But in the fall of 2000, Iraqi officials told Coastal representatives Saddam would require oil recipients to pay secret surcharges for the privilege of purchasing Iraqi crude.

According to the indictment unsealed today, Wyatt, along with Swiss business executives Catalina del Socorro Miguel Fuentes (known as Cathy Miguel) and Mohammed Saidji shipped more than $500,000 in cash to the Jordanian bank account in August 2001, and then another 1 million euros between March 27, 2002, and April 1, 2002, to pay surcharges.

Wyatt is also accused of lobbying U.N. "overseers" who set the price of Iraqi crude sold under the oil-for-food program to lower the official selling price. That enabled recipients of the Iraqi crude to pay Saddam's illegal surcharges and still earn a profit, prosecutors say.

Wyatt's Coastal Corporation was eventually purchased by Houston-based El Paso Corp. Asked about the Wyatt indictment, El Paso spokesman Richard Wheatley said: "We continue to cooperate with the U.S. Attorney's office, the SEC, and various Congressional committees."